Competitiveness through Strategy and Efficiency

Size: px

Start display at page:

Download "Competitiveness through Strategy and Efficiency"

Cordelia Caldwell
5 years ago
Views:

1 Enhancing Enterprise Competitiveness through Strategy and Efficiency Densil A. Williams Department of Management Studies UWI, Mona August 2009 Jamaica Computer Society Conference, April 15-16, 2011, UWI, Mona.

2 Contents Firm Level Competitiveness What does it really mean? Common Competitiveness Drivers in Caribbean Firms Generic Competitive Strategies Where should Caribbean Firms be Located? Risk involved in pursing Generic Strategies Operational Efficiency and Competitiveness Concluding Thoughts Know the Industry Structure

3 Firm Level Competitiveness: What does it really mean? Competitiveness at the national level is seen as a non zerosum game. All nations can achieve competitiveness if viewed through the lens of improved productivity, not competition Is this true at the firm level?

4 Firm Level Competitiveness: What does it really mean? Enterprise competitiveness is multifaceted Ability to export to an array of countries without preferential treatment Ability to engage in FDI using local talents and skills Ability to operate at international standards Ability to earn above average return while competing with indigenous enterprises in the free market

5 Common Competitiveness Drivers in Caribbean Firms Effective Risk Management (BNSJ, First Life) Highly focused activities Diversification to offset threats Work Place Transformation and Upgrade HR (Jamaica Broilers) Up-skill employees Requisite training Benchmark against international competition (Former Superplus group) Broader world view Good knowledge of the industry

6 Common Competitiveness Drivers in Caribbean Firms Focus on Innovation, Marketing, Technology an Quality (Sandals, Superclubs) Marketing was critical for Courts in its turn-around LASCO innovative in its soy-based drink ISO certification, mark of quality (Wray & Nephew) Corporate Leadership (Grace Kennedy) Central to drive change in the organization

7 Generic Competitive Strategies: Where should Caribbean Firms be Located? Porter identified three (3): Cost leadership Differentiation Focus Differentiation Cost Leadership

8 Generic Competitive Strategies: Where should Caribbean Firms be Located? Strategic Advantage S t r a t e g i c Broad (Industry Wide) LOW COST Cost Leadership DIFFERENTIATION (Uniqueness) Differentiation T a r g e t Narrow (Particular Segment) Cost Focus Focused Differentiation

9 Generic Competitive Strategies: Where should Caribbean Firms be Located? Risks from going Generic Sustaining the Strategy Technological changes nullify past investment and learning Imitation narrows perceived differentiation Erosion of strategic value due to industry evolution Removal of defenses against competitors How do you guard against these risks?

10 Operational Efficiency and Competitiveness Efficiency and Innovation are important to maintain competitive advantage Efficiency helps to create greater value, lead to lower cost and higher quality output All areas of the value chain must be operated efficiently in order to maintain competitiveness

11 Operational Efficiency and Competitiveness Source: Adopted from Porter, M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York : The Free Press

12 Operational Efficiency and Competitiveness Attaining Operational Efficiency Look at your current situation How does my work processes match up with the industry standards? Optimize business processes Remove bottlenecks that reduce time to market products (Think BPR!!!!!!)

13 Operational Efficiency and Competitiveness Upgrade assets to current industry standards Helps to cut operational costs Modernize business thinking Try to be lean and focus on sharing production capabilities Create new opportunities from outsourcing (Digicel with the topup services to the corner shopman))

14 Operational Efficiency and Competitiveness Dynamic efficiency is also critical Quick and effective response to new developments in the industry Each enterprise must address their own unique operational challenges

15 Concluding Thoughts Enterprise competitiveness will require a mix of efficiency and good strategy Each firm must understand the industry structure in which it operates. Porter s five forces model Bargaining power of suppliers Bargaining power of buyers Threat of substitute products Threat of new entrants Rivalry among competing firms

Real Estate and Construction. Market Segmentation

Real Estate and Construction. Market Segmentation Real Estate and Construction Market Segmentation What problem are We Trying to Solve - Strategic Level? About the Construction Industry: Characteristics Huge - $4 tr worldwide Local Project Based Unique